We all need some extra cash from time to time. It could be for a wedding, a medical emergency, house renovation or other special celebrations. Thankfully, in the financial services ecosystem, there are a variety of products that give people monetary freedom, when they face a cash crunch. It’s at times like these you could either use a credit card, take out a personal loan or apply for a credit line. Among the plethora of tools, most commonly-availed are personal loans and credit cards. However, there is an alternative financial product that is a hassle-free, flexible option to borrow money for emergency cash needs, which is the credit line.
There are several features of these products that separately set them apart from each other. Here are some key features of each of these products.
1. Personal Loan
Personal loans are a very straightforward way of borrowing funds. They are a good option for someone who is looking for a lump sum of money, especially in the case of big-ticket purchases. The interest rates for a personal loan is usually calculated by factoring a person’s credit history, their monthly salary, and most importantly, the total borrowed amount. Applying for a personal loan takes a lot of paperwork and is also time-consuming. However, once the personal loan is issued, the funds can be used for any big-ticket personal requirement such as hospital expenses, wedding costs or to fund a trip. Some folks even opt for personal loans to pay off their credit card debts.
2. Credit Card
Credit cards are a popular option to get access to quick funds. Subscribing to a credit card gives people the financial freedom to make sudden purchases and payments. When a credit card is used to make big-ticket purchases, it can rake up a bunch of reward points and other additional benefits. Applying for a credit card is also fairly simple, it depends on your income and your credit score. A strong word of advice when subscribing to a credit card is ensuring timely repayment of the entire borrowed amount and not just the minimum repayment. The primary reason behind this is because if the credit card payment has been delayed, it could rake up high-interest rates of up to 30 - 40%.
3. Credit Line
A credit line or a line of credit is a ready source of funds that can be accessed for a wide array of purposes. In simple terms, a line of credit is arranged between a financial institution and a customer. Once a credit line is issued, the financial institution reserves a sum of money for customers from which they can borrow any amount, instantly. As a line of credit user, you have the option to take money out as needed from the total reserved sum ranging from a small ticket size like ₹3,000 up to large amounts like ₹5L. The credit line is issued based on the credit score and other income factors of the customers. The advantage of credit lines is that you only need to pay interest for the amount that you withdraw. As long as timely payments are made, and expenditure does not exceed the approved credit limit, a line of credit can be used for repeat borrowing.
If you’re looking for an easy way to apply for a line of credit, then try out MoneyTap. Our product offers you the ease of applying for a credit line in two easy steps.
- First, download the MoneyTap Credit Line app from your app store. Through a simple and secure registration process, fill up basic details such as your age, city, PAN number and income so that we can determine your eligibility.
- Complete your KYC or Know Your Customer documentation for a final round of approval. MoneyTap only works with regulated financial institutions in India governed by RBI and we have our own NBFC license as well. This makes MoneyTap a regulated and legally compliant entity.
Once your MoneyTap credit line has been issued, you can borrow from your approved limit at any time with just a click of a button. We offer flexible EMIs that can be accessed through the app.
To know more about our product, click TB
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